EU targets Russian intelligence chiefs, readies tougher sanctions

BRUSSELS – Stung into action by the shooting down of Malaysia Airlines flight MH17, the EU put Russia’s intelligence chiefs on its sanctions list Saturday as it readied much harsher measures against Moscow over the Ukraine crisis.

The director of the FSB security service, Alexander Bortnikov, and the head of the Russian Foreign Intelligence Service, Mikhail Fradkov were among 15 people and 18 entities hit with asset freezes and visa bans, the EU’s Official Journal said.

Bortnikov and Fradkov, both members of the Russian Security Council, were included for their part in “threatening the territorial integrity, sovereignty and independence of Ukraine,” it said.

Among other figures was Chechen President Ramzan Kadyrov, having offered to send troops to support the pro-Moscow rebels in eastern Ukraine who have been accused of shooting down flight MH17 with a Russian-supplied missile.

The entities included rebel militias and authorities in Ukraine, plus companies said to have helped and profited from Moscow’s March annexation of the Crimean peninsula which is home to Russia’s Black Sea fleet.

– Tougher sanctions Tuesday –

EU officials said an additional list expected Tuesday may target figures close to Russian President Vladimir Putin.

Saturday’s announcement means a total of 87 people and 20 entities have been hit with ‘Phase 2’ asset freezes and visa bans by the European Union as it prepares to adopt broader ‘Phase 3’ measures targeting key economic sectors.

The 28 member state ambassadors to the EU agreed Friday the legal instruments to give effect to the new measures which cover four areas — access to capital markets, defence, dual-use goods and sensitive technologies, including in the energy sector.

The ambassadors and officials will continue discussions over the weekend and on Monday, aiming for final clearance at another meeting Tuesday.

Normally, EU leaders would meet at that point to give political approval but European Council president Herman Van Rompuy has already asked them in a letter to instruct their ambassadors to agree to the new measures that day.

European Commission head Jose Manuel Barroso said Friday the proposed package was effective, well targeted and balanced, as well as flexible enough to allow the EU to adjust to events on the ground.

Barroso also reiterated calls for Russia to reverse course in Ukraine, cut its support for the rebels and commit to serious talks on a peaceful settlement of the crisis.

Up to now, the fact that many member states have major economic ties with Russia has made the EU reluctant to adopt the tougher economic sector measures backed by Washington but the shooting down of MH17 with the loss of nearly 300 lives has clearly changed the thinking.

EU officials said it was likely the new sanctions will limit access to the long-term capital markets, making it more difficult for Russian companies to raise fresh funding and putting the economy under even more pressure.

In his letter, Van Rompuy said such measures would have “a strong impact on Russia’s economy” but only a “moderate effect” on a still recovering European economy.

A proposed arms embargo will affect only future contracts, sparing France’s blushes over its much-criticised 1.2 billion euros sale of two Mistral warships to Russia.

In the techology sector, sanctions will apply to the oil sector but not gas, of which Russia supplies about a third of the EU’s needs, Van Rompuy said, highlighting the need to guarantee the bloc’s energy security.

Some EU members like Hungary are opposed to severing commercial ties with Russia especially over energy supplies.

Hungarian Prime Minister Viktor Orban said Saturday while he supported Ukraine he had to think of his country’s interests and would not give up on Russia’s controversial South Stream gas pipeline project.

“If the South Stream gas pipeline must pass through our country in order to maintain good business relations with Russia, then we are clearly for South Stream,” he said.

Russia has consistently derided US and EU sanctions as ineffective, counterproductive and harmful to important shared interests, especially in the face of growing terrorist threats and global instability.

On Saturday, it repeated the message.

The EU “has practically speaking put at risk international cooperation in the area of security,” the Russian foreign ministry said.